Former Andhra Bank director Anup Prakash Garg, who was arrested by the Enforcement Directorate in January for receiving bribes from the Sterling Biotech Limited (SBL) group, laundered the money through shell companies arranged by Kolkata-based entry operators.
According to the ED, during Mr. Garg’s tenure, the SBL group got loans to the tune of ₹235 crore from the Andhra Bank. He allegedly received over ₹1.52 crore during 2009-10 for facilitating the loan. According to the chargesheet, Mr. Garg then started looking for ways to legitimise the ill-gotten money. “He visited the office of his friend Raj Kumar Agarwal at Chattisgarh’s Raipur, where he met one Rohtash Agarwal and discussed with them about taking over a good net-worth company with assets lying in the form of investments in shares of other shell companies as shown in its balance sheet,” said an official.
The charge sheet alleges that Mr. Garg was introduced to one Ramchandra Kedia, a resident of Kolkata, who arranged for him [to invest in] a company called Fairdeal Vinimay Private Limited with ₹5-crore net-worth, through an entry provider, Bipin Kejriwal.
Initially, ₹6.41 crore in unaccounted cash was infused into the company by selling unquoted equity shares of other shell companies. The company’s on-paper directors were later replaced with new ones from Madhya Pradesh’ Indore, who were Mr. Garg’s associates.
“The same chartered accountancy firm managed the finances of Mr. Garg and Fairdeal Vinimay,” an ED official said.
In 2011, Garg allegedly incorporated RAG Buildtech Private Limited in the name of his family members, but he actually controlled it.
Son’s involvement
During custodial interrogation, Mr. Garg purportedly confessed that the company affairs were being managed as per his directions. His son also admitted that being a company director, he handled its operations under his father’s supervision.
In 2011, the bank official allegedly infused a total sum of ₹1.15 crore in RAG Buildtech “in the garb” of issuing shares at a premium to three shell companies: Fairdeal Vinimay, Parasmani Tradecom and Vaikunth Vintrade. These shell companies were controlled by entry providers.
